A confluence of geopolitical and geoeconomic factors, such as the U.S. withdrawal from Afghanistan, ongoing war in Ukraine (and resulting rise in fuel and food prices), and coronavirus pandemic, have created an opportunity for the rise of minilateral forums. During President Joseph R. Biden Jr.’s recent Middle East tour, the first virtual I2U2 summit was held bringing together the leaders of India, Israel, the United Arab Emirates, and the United States. The parties focused on six areas for cooperation – water, energy, transportation, space, health, and food security – and agreed to bolster bilateral economic partnerships related to trade, infrastructure, and investment in the region and abroad.
In 1992, when India established full normalization of ties with Israel, the emergence of a minilateral summit like I2U2 would have seemed impossible. The four countries are geographically disconnected, ideologically different, and demographically divergent. However, their interests are increasingly aligning. And, as a rising global power with deep historical, cultural, political, and economic ties with many countries in the Middle East and South Asia, or West Asia, India’s integration seems natural. This is largely a result of Indian Prime Minister Narendra Modi’s newfound activism in New Delhi’s foreign policy approach and economic diplomacy particularly in West Asia since 2014, which has greatly contributed to shedding India’s traditionally inward-looking image. Modi’s Link and Act West policy, in particular, reversed the policy inertia that defined India’s West Asia strategy. And, as the sixth-largest economy in the world (projected to become a $5 trillion economy by 2026-27 and a $10 trillion economy by 2033-34), India holds a pivotal position as a major global economic behemoth and consumer market.
Alignment of Interests: The Evolution of I2U2
There has been an alignment of geopolitical and geoeconomic interests shaping relations among India, Israel, the UAE, and the United States. As the United States pivots to Asia and explores burden-sharing opportunities in West Asia, India is a valuable partner. While India and the United States differ in a number of areas, including over India’s engagement with Iran and Russia, the United States can take advantage of India’s friendly ties with rival countries in the region to help in bridging the divide in pursuit of a more robust security architecture in the region.
Meanwhile, India’s ties with Israel have greatly transformed since India established diplomatic relations with Israel in 1992. That year, bilateral trade between India and Israel totaled only $200 million. However, from April 2021 to January 2022, it reached nearly $6.3 billion (excluding defense) with the balance of trade in India’s favor. Israel has become one of India’s biggest weapons suppliers, on par with the United States and Russia. In addition, India and Israel have established numerous strategic partnerships in the fields of agriculture, climate, water, science and technology, and food security.
Over recent years, India has become a key trading partner for Gulf Arab countries. In February, India and the UAE signed a Comprehensive Economic Partnership Agreement, allowing most of India’s exports duty-free access to the UAE. CEPA is expected to increase bilateral trade in goods, which currently stands at $60 billion annually, to up to $115 billion in the next five years. India and the UAE have signed additional agreements in technology transfer, renewable energy, infrastructure development, combatting cybercrime, food security, cultural exchange, space, and skill development. With India’s manpower, the UAE’s expanding investment interests, and Israel’s technical expertise – a trifecta of complementary abilities, skills, and interests – India-UAE-Israel trilateral trade has the potential to reach $110 billion by 2030.
Furthermore, Iraq, Saudi Arabia, and the UAE are among India’s top five oil suppliers. As India meets 85% of its crude oil demand through imports, ensuring stability in the Gulf region is critical for India’s energy security.
One of the key characteristics of independent India has been a policy of strategic restraint – a reticence to use force for the sake of policy or politics. Postcolonial India’s relations with Israel and the United States were eclipsed by the policy of India’s first prime minister, Jawaharlal Nehru, of nonalignment. India adopted the principles of anti-colonialism, Third-Worldism, universalism, and internationalism and avoided joining military alliances or blocs for the sake of great power politics.
In the 1970s through ‘80s, India’s enhancement of its military capabilities was tempered by its reluctance to use hard power for intervention overseas. India projected its military power during its intervention in Bangladesh’s war of independence from Pakistan in 1971, prevention of a military coup in Seychelles in 1986, and intervention in Sri Lanka in 1987 and the Maldives in 1988. However, India has avoided using its armed forces for political ends abroad since the end of the Cold War.
The Iraqi invasion of Kuwait in August 1990 marked a key shift in India’s policy of engagement toward the Gulf region with geoeconomics slowly replacing geopolitics. Showing restraint and a policy of not taking sides in conflicts in the region and abroad became the mainstay of Indian foreign policy. This policy of strategic restraint and nonintervention dictated India’s foreign policy up until Prime Minister Manmohan Singh’s administration from 2004-14. Although the Non-Aligned Movement lost its relevance after the end of the Cold War, strategic autonomy, which is a core tenet of the nonalignment policy, still drives India’s foreign policy decision making.
In recent years, India has shed its policy of restraint focusing instead on strategic autonomy. India has recalibrated its West Asia policy toward “cooperative bilateralism” and “multialignment” – developing issue-based strategic partnerships with multiple countries in the region regardless of their rivalries and hostilities. India aims to leverage the new economic opportunities presented by the emerging multipolar world order where the benefits of interdependence far outweigh the risks of nonengagement.
Under Modi’s administration, India’s relations with the Gulf Arab countries and Israel have greatly transformed. A key shift in policy was Modi’s unlinking of India’s relations with Israel and Iran. Alongside economic relations and remittances provided by the Indian expatriate labor force, India and Gulf Arab countries are promoting political, maritime security, counterterrorism, intelligence sharing, and defense cooperation, breaking old dogmas. This is clear in the unprecedented visit of India’s army chief to the UAE and Saudi Arabia in December 2020, highlighting India’s growing defense and security partnership with the two Gulf countries.
A sea change ensued after the UAE, Bahrain, and other Arab states signed the Abraham Accords with Israel in 2020 agreeing to normalize relations. India welcomed the accords as it saw this as a way of facilitating peace and stability in the region. Since then, India has markedly strengthened ties with both Israel and the UAE.
The Space for Minilateralism
I2U2 is a natural extension of the bilateral relations already existing among India, Israel, and the UAE, and, sharing strong ties with each, the United States plays the role of facilitator. While the four countries may have different notions about the significance of this grouping, for example balancing China in the case of India and the United States or Iran in the case of the UAE and Israel, there are many commonalities and shared interests to drive the forum. As India aspires to be a great power and rule shaper in international politics, minilateral forums, like I2U2, provide India an opportunity to navigate international problems collectively and advance its economic interests.